Overview
In this article, we'll cover frequently asked questions about Direct Debit.
Q - What is Direct Debit?
Direct Debit allows you to collect payment directly from your customer's bank account once they've authorised the payment.
Instead of entering card details, the customer provides bank account details and approves the debit.
Q - How does Direct Debit work?
If Direct Debit is enabled:
The customer selects Direct Debit as their payment method
They enter their bank account details and provide authorisation
The payment is processed through Fergus Pay
Funds are deposited into your account according to your standard payout schedule.
Q - Who is Eligible for Direct Debit?
Direct Debit is available to registered businesses. Direct Debit may require additional business verification before it can be enabled. Depending on your region, Stripe may request extra business information to activate this payment method.
Q - When do I receive funds from a Direct Debit payment?
Direct Debit payments may take longer to process compared to card payments.
Once the payment has successfully cleared, funds are paid out according to your standard Fergus Pay payout schedule.
Q - Can I pass the Direct Debit fee on to my customer?
In New Zealand and Australia, you can choose to either cover the Direct Debit fee or pass it on to the customer. In the United Kingdom, you cannot pass the fee to your customer, and you must cover the processing fee.
Set this in the Who pays the fee column in your Fergus Pay settings. See Manage Payment Methods and Fees in Fergus Pay.
Q- How do I enable or disable Direct Debit?
You can turn Direct Debit on or off for your whole business, or for a single invoice.
For your business (default setting):
Open Payments from the navigation.
Select Overview and Settings.
Under Settings, find Card Payment Fee.
Tick or untick Direct Debit in the On by default column.
For one invoice:
Open the draft invoice.
Open Payment Options.
Under Online Payment Fee, tick or untick Direct Debit in the On this invoice column.
If enabled, customers will see Direct Debit as a payment option when paying an invoice. Check these settings before you approve the invoice, as they can't be changed afterwards.
Q - Can I offer Direct Debit only?
Yes. Leave Direct Debit ticked and untick every other payment method. You can do this as your company default, or on a single draft invoice.
For your business:
Go to Payments > Overview and Settings.
Under Settings, find Card Payment Fee.
In the On by default column, keep Direct Debit ticked.
Untick Visa & Mastercard, American Express, Klarna and Afterpay/Clearpay.
For one invoice: open the draft invoice, go to Payment Options > Online Payment Fee, and leave only Direct Debit ticked in the On this invoice column.
For more on these settings, see Manage Payment Methods and Fees in Fergus Pay.
Q - What are the Direct Debit processing fees and Transaction Limits?
Processing fees vary by region:
Region | Processing Fee |
Australia | 1% max $5 |
New Zealand | 1% max $5 |
United Kingdom | 1% max £4 |
Q - Can Direct Debit payments fail?
Yes, Direct Debit payments may fail if:
There are insufficient funds in the customer's account
The bank declines the transaction
The authorisation is cancelled
The bank account used matches your own business bank account. Fergus blocks these payments to stop an invoice being paid with your details instead of your customer's.
If a payment fails, the customer will need to use another available payment method.
Q - Does enabling Direct Debit affect existing invoices?
Invoices you've already approved keep their existing payment settings, so enabling or disabling Direct Debit won't change them.
Changes to your company defaults apply to future invoices, and to draft invoices that still use your defaults. A draft with its own saved payment settings keeps those choices.
Thank you for taking the time to read our Article. If you have any questions, please get in touch via support@fergus.com